- GBP/JPY is likely to stabilize around 198.60 as the market anticipates UK labor market figures for the three months ending in June.
- A recent summary from the Bank of Japan reveals concerns over global trade risks among authorities.
- GBP/JPY is currently trading above the 20-day EMA.
During the late Asian trading session on Monday, the GBP/JPY pair appears to be hovering around 198.60. The pair is looking to extend its four-day upward trend, but investors are primarily focused on upcoming UK labor market data set to be released on Tuesday.
Traders will be closely watching the employment figures, hoping to gauge if employers are still cautious about hiring, which could impact their contributions to the Social Security system.
Economists anticipate that the ILO unemployment rate will hold steady at 4.7%. In contrast to previous data showing 5.0%, average earnings—including bonuses—are expected to rise by 4.7% year-over-year.
In Japan, a summary from the Bank of Japan indicates that despite a recently signed tariff agreement with the United States, officials still have reservations regarding potential trade war risks. Nonetheless, the central bank remains open to the possibility of additional interest rate hikes throughout the year.
The GBP/JPY has recently bounced back from last week’s low of 195.00 to approach nearly 198.60. Its short-term trajectory has turned bullish after crossing above the 20-day exponential moving average (EMA).
The 14-day relative strength index (RSI) has been fluctuating between 40.00 and 60.00 for an extended time, suggesting a sideways trend.
If the pair surpasses the high of 198.83 from Friday, it could potentially reach the psychological mark of 200.00, with a peak target of 203.16 in sight.
Conversely, should the pair dip below the May 6 low of 190.33, it could expose the March 11 low of 188.80, and then the February 7 low of 187.00.
